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Tilapia

Tilapia offers a “blank canvas” for innovative chefs   looking to create a new whitefish item for their menus

Last summer, when the culinary team at Red Lobster was looking for a fish to roll out on its “Fresh Choices from the Sea” menu nationwide, it selected some very predictable favorites, like Atlantic salmon, mahimahi, grouper and trout. But the mammoth dinnerhouse chain also decided to take a chance on a fish most of its customers had never heard of: tilapia.

Describing it on the menu as “a tropical white fish with a firm texture and mild, sweet flavor,” Red Lobster’s chefs came up with a preparation that emphasized the ingredients, while giving the mild-tasting fish an exotic, exciting flair. The result: Baja Crunch Tilapia.

Encrusted with tortilla breading and Southwestern seasonings and topped with a pico de gallo salsa, Baja Crunch Tilapia is not your typical Red Lobster fare.

But it’s been a huge hit. For the first three months it was on the menu, the chain went through almost 200,000 pounds of fillets.

That’s very good news for tilapia producers, who keep cranking out fish as fast as they can sell it. In the first six months of 2001, imports of high-quality tilapia fillets were up almost 50 percent. Since 1995, annual imports of fresh and frozen tilapia fillets have grown 82 percent, from 3,700 metric tons to almost 20,000 metric tons.

Almost 500,000 pounds of fresh tilapia fillets are sold in the United States every week, about half of which is from Ecuador. While that may be a long way from the 4 million pounds of fresh Atlantic salmon fillets hitting the U.S. market each week, it’s still a lot for a fish unfamiliar to most consumers.

It’s also surprising, considering that fresh tilapia fillets were selling for almost $1 a pound more than fresh farmed salmon fillets for most of the summer.

While both foodservice operators and retailers are selling more tilapia, retailers are selling the bulk of the spiraling supply.

“Retailers drive their business with sale items. They have to count on fish being there, and they have to know what the price will be,” says one Miami tilapia importer. “We can do that. Farm-raised fish like tilapia, salmon and catfish are becoming the foundation of retail. We’re benefiting from the deep and continuing scarcities of ocean-caught whitefish.”

A medium-sized supermarket chain on the East Coast, where most fresh tilapia is sold, can sell more than 15,000 pounds of fillets a week when tilapia is put on special at $4.99 a pound, a big jump from the usual 4,000 pounds a week, reports another importer.

The recent consolidation at the retail level has also benefited tilapia producers.

“Seafood at retail is becoming more and more a contract business, where big chains want to deal direct with a small number of large producers who can make their job easier,” says one producer.

“They’re under a lot of pressure to deliver results. They don’t have time to deal with all the hassles that come with wild fish.”

The big club-store chains have also added tilapia as a standard SKU to their fresh seafood cases in some parts of the country. They typically sell 3 pounds for $4.79 a pound, about 50 cents more than farmed salmon, which is their biggest-selling fresh fish item by far.

Tilapia producers say their fish offers several advantages over farmed salmon. It’s a leaner fish, they contend, which means you can eat it twice a week without being overwhelmed by the pronounced flavor of an oilier fish like salmon.

The growing cycle of tilapia is also a lot shorter than that for Atlantic salmon, eight to 10 months versus 24 to 36 months. Tilapia are also very hardy, says one farmer: “They don’t get sick.”

Still, farming tilapia is no picnic, argues one producer who has farms in Indonesia and Honduras.

“It’s hard to find people who can manage tilapia farms in Third World countries,” he says. “It’s an ongoing problem.”   

Nevertheless, some of the biggest names in the aquaculture business from Norway to Ecuador to Thailand are in the process of making some very big bets that tilapia will be the white-fleshed equivalent of farmed salmon, once producers achieve the equivalent economies of scale and drive production costs down.

One way to do that very quickly is to start farming genetically modified tilapia. Already, researchers in the United Kingdom are planning to hold field trials of GM tilapia in Thailand in 2002. Their strain of tilapia, which has been bred with growth-hormone genes from salmon, grow three times faster than current tilapia strains.

Alarm bells are already going off in Europe, where GM foods conjure up images of scientists running amok whipping up “Frankenfoods” in their labs. But Asian producers are expected to make widespread use of the new GM tilapia strains, which could be widely available in just three years.  

In the meantime, tilapia producers in Central and South America say they’ll do their best to keep growing fish, but only as fast as they can sell it at a profit. That just four companies sell more than 75 percent of all the fresh tilapia fillets purchased in the United States may make it possible.

“Everybody recognizes the market, and nobody wants to ruin it,” says Ecuador’s largest producer. “We’re all being very careful not to over produce.”

In contrast to the relatively controlled growth of the fresh market, the market for frozen tilapia has been quite chaotic lately.

Until a few years ago, most of the frozen tilapia sold in the United States was smaller, inexpensive whole fish from farms in Taiwan. Sold in ethnic markets, it could be picked up from importers for 75 cents a pound or less.

The bigger fish were filleted, treated with carbon monoxide (CO), also known as “tasteless smoke,” and sold in Japan.

Labeled “izumi-dai,” the Japanese word for snapper, it was a hot seller in sushi bars, where it was an inexpensive substitute for real Japanese snapper.

However, Japanese authorities, largely at the behest of the sashimi tuna industry, banned the importation of CO-treated seafood in 1997, forcing the Taiwanese fish farmers to develop markets in the United States, where the attractive vacuum-packed fillets with bright-red fat lines became a big hit.

The first year after CO tilapia fillets were banned in Japan, U.S. imports of frozen tilapia fillets from Taiwan almost doubled, to 1,300 metric tons. Then, in 1999, China got into the act.

Attracted by the lower production costs, Taiwanese investors rushed to the southern provinces of Guangdong and Hainan and taught the Chinese how to produce high-quality tasteless-smoked tilapia fillets. As usual, it didn’t take them long to learn.

Between 1998 and 1999, U.S. imports of frozen tilapia fillets from China jumped from just 38 metric tons to almost 750 metric tons. By 2000, imports of frozen tilapia from China reached 1,800 metric tons, surpassing imports of frozen fillets from Taiwan.

But doubling the total supply of frozen tilapia fillets for the U.S. market has some very predictable results, especially given the Chinese style of selling seafood.

“The Chinese like to sell full container loads,” says one importer of Indonesian tilapia fillets. “They like to do large volumes on small margins. But the problem is, there are very few container-load buyers of frozen tilapia fillets.

“The market still isn’t that big. You can sell containerloads if it’s a commodity. The problem is frozen tilapia fillets are not a commodity.”

With frozen tilapia fillets piling up in cold storages, prices have tumbled. “You can name your price,” says one distributor, especially for Chinese product.

In some cases, large 5/7-ounce CO-treated fillets that were selling for almost $3 a pound last year had tumbled below $2 by this September. There were some reports of small 3/5 ounce fillets being sold by importers for as low as $1.50.

Although tilapia prices have softened, some U.S. producers are still optimistic they can make a go of farming tilapia and processing the fish into fillets. The most ambitious effort is being undertaken by a Southeastern farmers’ cooperative that sells feeds and fertilizers.

The co-op, which received a $10 million federal loan in 2000, has developed a turn-key, intensive, recirculating, tank-farm system and sells it to tilapia farmers in Georgia and North Carolina for as little as 10 percent down. If the co-op is correct, farmers can pay the systems off in three years.

Whether U.S. tilapia farmers can compete in the fresh fillet market remains a big question. A tilapia expert at the University of Arizona pegs production costs for U.S. tilapia farmers at about 90 cents a pound, compared to 50 cents a pound in Ecuador.

While some U.S. buyers may be willing to pay a premium for a grown-in-the-USA label on their tilapia fillet, the U.S. farmers will probably be limited to niche markets.

In the meantime, existing U.S. tilapia growers are limited to the live and fresh whole markets. At certain times of the year, especially Chinese New Year’s, demand can drive wholesale prices for live tilapia as high as $2 a pound, but typical prices in the easily glutted live market average between $1.25 and $1.50.

Supply outlook

On the fresh front, Ecuador continues to be the big news. Through the first six months of 2001, U.S. imports of fresh tilapia fillets from Ecuador were up 73 percent, to almost 2,700 metric tons. Although most of Ecuador’s embattled shrimp farmers have tried making a go of tilapia, most of the spiraling production is coming from dedicated tilapia farms.

“No one has figured out how to produce a 5- to 7-ounce fillet from a 20-acre shrimp farm,” says a tilapia-fingerling supplier.

No one doubts that more tilapia from Ecuador is on the way. With production costs of about 50 cents a pound, tilapia is a pretty profitable fish at current market prices, a surefire formula for increased production. According to an Israeli tilapia consultant, one Ecuador company is constructing a massive farm that will eventually be able to produce 25,000 metric tons of tilapia a year, about the same amount that all of Ecuador’s tilapia farms will produce in 2001.

Tilapia production from other Latin American countries also continues to rise. Imports of fresh fillets from Costa Rica jumped another 32 percent through June, to 1,680 metric tons.

Although imports from Honduras declined slightly, to 550 metric tons, they are expected to grow in 2002 when a large new farm gears up its production.

Due to a big jump in imports from Indonesia, U.S. imports of frozen tilapia fillets continued to increase sharply in 2001, jumping 40 percent, to 3,140 metric tons, through June. But compared to fresh, the supply outlook for frozen tilapia is somewhat muddy.

The meteoric rise in Chinese imports is over for the time being, as the export prices being paid to Chinese producers have fallen below the cost of production. According to recent reports from importers who have visited China, a lot of Chinese tilapia farmers have switched to shrimp, which is currently more profitable.

Through the first six months of the year, Chinese imports of frozen tilapia fillets climbed only slightly, from 817 metric tons last year to 900 metric tons in 2001.

A weakening Taiwanese dollar against the U.S. dollar has suddenly given a competitive boost to Taiwanese tilapia producers. Unlike the Chinese yuan, which trades at a fixed rate to the U.S. dollar, Taiwan’s dollar has declined due to the country’s economic woes. The weaker currency is an important reason Taiwanese tilapia fillet exports through June jumped almost 25 percent, to 950 metric tons.

No longer taking a back seat to China and Taiwan, Indonesia recently emerged as the leading supplier of frozen tilapia fillets to the United States when the country’s leading producer began exporting product from a large new farm. Through June, U.S. imports of frozen tilapia fillets from Indonesia more than doubled, to just over 1,000 metric tons.

Look for supplies of frozen tilapia fillets to grow only moderately in the near future. As long as wholesale prices for sashimi-grade vacuum-packed fillets hold at around $2 a pound, the U.S. market is not very attractive for producers. The growing availability of fresh fillets from Latin America is also expected to limit demand for frozen fish.

Imports of frozen whole tilapia have risen dramatically. Through June, imports surged 40 percent, to more than 17,000 metric tons, due to a doubling of imports from Taiwan, which reached more than 11,000 metric tons.

Supplies of live and fresh whole tilapia from U.S. producers should increase moderately as demand continues to grow. Given the relatively high production costs of U.S. producers, though, the industry will probably not expand significantly due to the marginal economics.

Price trends

With supplies increasing almost 50 percent over last year, it’s no surprise that the price of tilapia has come down. The surprise is that they haven’t come down more.

Despite the continued surge in supply, prices for large 5-to-7-ounce, fresh tilapia fillets have declined slightly and remained above $3 through the summer.

“Prices held without the major collapse some people predicted,” says one producer. “Still, eventually prices are going to come down.”

This September, most importers were selling deep-skinned fresh fillets from Ecuador for $3 to $3.40 a pound (f.o.b. Miami), depending on size, down about 25 cents a pound since the beginning of 2001. As long as supplies of fresh fillets keep increasing at their current rate, the pressure on prices will continue.

“The price will come down for the right reasons — increased volumes and increased efficiencies,” predicts one Ecuadoran producer. “We’ll eventually need to give it to consumers at $3.99 or even $2.99 a pound to keep growing the market. We have to be able to do that and still make a profit.”

The price of frozen fillets has been all over the ballpark, depending on quality and how desperate the seller is. While some importers have bailed out of Chinese product for less than $2 a pound for small tasteless-smoke-treated fillets, most program business for larger fillets is still in the $2.40 to $2.65-pound range, ex-importer.

Although prices are not likely to rebound back near $3 a pound, frozen tilapia fillets probably won’t be quite as good a deal in the near future.

Until Asian farmers make major breakthroughs on production costs, ex-importer prices should remain in the $2.25 to $2.75 a pound range, depending on size and quality. 

Buying tips 

The biggest reason for the dramatic growth in tilapia consumption is the fact that the quality of both fresh and frozen fillets has become much more consistent in recent years and the fish are relatively easy to buy. Most of the fresh tilapia fillets sold in the United States, for example, are now deep-skinned, which prevents them “from going chocolate on day three and picking up a mossy taste,” says one producer.

With so much high-quality fresh product available, new tilapia producers have no choice but to maintain high standards, including starving and purging their fish in algae-free water to prevent off-flavor. Deep-skinning, which reduces fillet yield from about 35 percent to about 30 percent, removes the fat layer, which turns brown after being exposed to air.

An increasingly popular alternative to deep-skinning, at least for frozen producers, is to put fillets in a bag filled with CO for about 30 minutes, which produces an attractive cherry-red fat layer. This treatment is widely used by Chinese and Taiwanese producers, who market CO-treated, vacuum-packed fillets as “sashimi-quality” in the United States.

Although Food and Drug Administration regulations require this product to be labeled as having been treated with CO, very little is. Instead, it is usually labeled izumi dai, the Japanese word for snapper. 

In the case of frozen tilapia fillets, though, buyers need be aware that sashimi-quality is no guarantee of high quality. The quality of product from China, especially, can vary considerably. Although CO-treated product can look good, it can still have an off-flavor if the fish were not purged before they were processed. Some producers maintain, however, that the CO can help mask the off-flavor.

When buying fresh or frozen tilapia, take some extra time and learn about where the tilapia is grown and how it is processed. Once you find a label that meets your quality requirements, stick with it. If you start chasing cheap tilapia, you may soon find it can actually be very expensive if your customers start rejecting your fish.

Culinary notes

Name an international cuisine or a cooking style, and tilapia can be adapted to it.

“It’s like a blank canvas,” says a chef of tilapia. The mild-tasting fish takes up just about any flavor. A lot of tilapia is still sold as generic fish at mainstream family restaurants. But as the fish comes out of the closet, more chefs, including some very famous ones, are taking dynamic approaches.

Louisiana’s living culinary legend, Paul Prudhomme, serves Pan-Fried Tilapia with Totally Hot Shrimp & Oyster Mulberry for $24.95 at his K-Paul’s Louisiana Kitchen in New Orleans. Chicago chef John Manion’s take on tilapia is Tilapia Veloso, ancho-dusted tilapia fillet, boniato mash, crab and sweet-corn salsa and a sweet-corn buerre blanc.

You won’t see it at many French restaurants, but tilapia is widely served in traditional preparations, sometimes with a French twist. At Tabor Hill Winery & Restaurant in Michigan, it is pan-fried with a Panko crumb crust and topped with a lemon-caper beurre blanc.

Tilapia has made extensive inroads as an inexpensive substitute for farmed striped bass at restaurants that like to serve whole fish. At Dallas’ La Calle Doce, whole tilapia is pan-fried with sautéed red and green peppers, tomatoes, black olives and onions.

At Sandy’s Polo Club, a white-tablecloth restaurant north of Pittsburgh, chef Luke Paul steams whole tilapia and serves it for $17.95. Tempo, a Mediterranean Bar and Grill in Encino, Calif., deep fries whole tilapia and serves it with an Israeli salad.

It’s hard to find a Thai or Chinese restaurant that doesn’t serve tilapia. At Siam Thai, outside Portland, Ore., Pla Lad Prig is whole, crispy-fried tilapia topped with chili and a garlic sauce. Most Chinese restaurants that have live tanks serve tilapia.

The Imperial Garden Seafood Restaurant in the South-Seattle suburb of Kent serves steamed tilapia over lemon grass. Another popular Chinese preparation is whole tilapia steamed with a ginger-and-scallion black bean sauce.

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